Foundations of Business Success

Tax Entity Comparision and Download

Agreements

Corporations
Articles of Incorporation/ articles of association/ corporate charter are the names of this entity's formational documents.

These documents include the name and address of the corporation; the corporate structure is included here. The Articles will also identify the registered agent for service of process and its amount and type of stock.

Limited Liability Companies (LLCs)
Limited Liability Companies use operating agreements. The operating agreement will detail the rights and responsibilities of each member, their percentages of ownership, and rules for transferring interest.

Partnerships
Partnerships use partnership agreements to define the roles and responsibilities of each member. The agreement will also detail how the partnership will operate.

In the next lesson, we will begin to craft your business agreement.

Let's keep going!

Business Registration

Registering the business entitles it to do business within a jurisdiction. This is often completed with the Secretary of State.

When registering the entity, you will need to identify a registered agent for the service of the process. It is recommended to enlist the help of your attorney, accountant, or a service.
If you are served, your registered agent will be responsible for notifying you promptly so that you can best prepare to defend the entity.

You may need to register in additional states if your operations are not contained to just one. Registration in other states besides the home state is called a foreign registration.

Depending on the state and the entity type, you can expect to pay filing fees ranging from about fifty dollars to several hundred. After the initial registration, the state will require you to register every 1-2 years.

Business Banking

A business bank account is crucial in separating your business and personal assets and setting the foundation for tax and bookkeeping.

Some bank accounts come with merchant services that allow you to take credit card payments along with many other helpful features.

There are many banks to choose from, and choosing the right one that meets your needs means you should think through how you will use the bank account. It may be best to use two bank accounts to get the best of both worlds.

Mission Statement, Vision Statement, and Description

A business plan is a needed step in each stage of starting and managing your business. It will be the roadmap for setting milestones and clarifying how to make money and grow. Please do not skip this step, as it will be helpful later in the course and the business.

Start by generating a mission statement and vision statement for the company. This will help to overall orient your company.
A mission statement should be a concise and simple sentence or two that describes your company’s purpose for being or raison d'être.

The vision statement is the idealized desired outcome that will energize your company. Summarizing this excellent outcome into a memorable or straightforward phrase can be incredibly effective. It is helpful to create a mental picture of your ideal company and start there. The key is to look at the long-term outcomes five or more years out.

Attached are some examples to help get your mental juices flowing.

In the following pages, we will develop these statements.

Marketing, Operational, and Management Plans

Marketing Plan

A solid marketing plan will even these essential parts:

• Market Research identifies the target market and supports pricing decisions for your products or services. Market research will help you develop effective messaging that resonates with the target market or specific demographics in that target market.

• Industry Research - identifies barriers to entering your market and helps you develop plans to overcome them.

• Competitive Analysis - identifies competitors and guides you in setting your price point.

Operations Plan

This section of the business plan should focus on who is responsible for the everyday tasks and actions that will make up your business activity.

Management plan

The management plan is different from the operational plan because it focuses on the roles within the business that have authority or custody of certain assets.

The management plan will define the business ownership structure, internal management team, and human resources.

Financial Projections

Predicting the financial health of your business is a critical skill that will serve you well at any stage of your business growth and development.

By projecting business operations, leadership can determine if the course they are setting will increase profits, secure funding, or grow the business.

Sales Projection
The Sales projection shows detailed information about your company’s revenue and expense over a given period. When preparing the sales projection, you should keep in mind factors affecting your market, even political or environmental.

Projected Cash Flow
The Projected Cash Flow considers how the money will come into your business and how the money will flow out of your business. A constant struggle with small companies is collecting enough invoices to cover the costs of the next period. Suppose you anticipate slow payments, bad weather, or supplier disruptions. In that case, you can better understand how much money you’ll need in the bank at any particular time.

Start Up/ Expansion Funding
For desired growth to happen, a new business, product, project, or service needs to be adequately funded. Understanding the sources of the funding is crucial to starting out on the right foot.

Break-Even Analysis
The break-even point is when the costs of producing your product or service equal the revenues for that product or service. This is important because it will allow you to price your goods and services better, set revenue targets, and make good decisions to accelerate your business. To calculate the break-even point, you will need an understanding of the fixed and variable costs involved in delivering your product or service.

Sales Projection spreadsheet to allow you to create your own sales projections